A G H Common Size Analysis 99.75% 33.57% 23.27% 15.03% 4.06% 75.93% 23.82% -2.04% 0.25% -1.80% 22.02% . B D E F 6 Statement of Operations 7 Year Ended September 30, 2020 (in thousands) 8 Revenue: 9 Net patient service revenue $64,505 10 Operating Expenses: 11 Personnel Expense $21,707 12 Medical supplies expense $15,047 13 Other operating expenses $9,721 14 Depreciation expense $2,625 15 Total operating expenses $49,100 16 Income from Operations $15,405 17 Other income (expenses): 18 Interest expense -$1,322 19 Interest and other income, net $159 20 Total other income (expenses), net -$1,163 21 22 Net income $14,242 23 24 25 Heart Hospital 26 Balance Sheet 27 September 30, 2020 (in thousands) 28 Current Assets: 29 Cash $14,202 30 Accounts Receivable, net $5,918 31 Medical supplies inventory $1,211 32 Prepaid expenses and other current assets $1,429 33 Total current assets $22,760 34 Property, plant, and equipment, net $33,769 35 Other assets $901 36 Total assets $57,430 37 38 Current Liabilities: 39 Accounts payable $1,910 40 Accrued compensation and benefits $2,543 41 Other accrued liabilities $1,843 42 Current portion of long-term debt $2,064 43 Total current liabilities $8,360 44 Long-term debt $21,640 45 Total liabilities $30,000 46 47 Owners Equity: $27,430 48 Total liabilities and shareholders' equity $57,430 49 Common Size Analysis 24.73% 10.30% 2.11% 2.49% 39.63% 58.80% 1.57% 100.00% 3.33% 4.43% 3.21% 3.59% 14.56% 37.68% 52.24% 47.76% 100.00% a. Perform a Du Pont analysis on the Heart Hospital. Assume that the peer group average ratios are as follows: Total margin Total asset turnover Equity multiplier Return on equity (ROE) Industry average 15.0% 1.5 1.67 37.6% Heart Hospital ? ? ? ? A G H Common Size Analysis 99.75% 33.57% 23.27% 15.03% 4.06% 75.93% 23.82% -2.04% 0.25% -1.80% 22.02% . B D E F 6 Statement of Operations 7 Year Ended September 30, 2020 (in thousands) 8 Revenue: 9 Net patient service revenue $64,505 10 Operating Expenses: 11 Personnel Expense $21,707 12 Medical supplies expense $15,047 13 Other operating expenses $9,721 14 Depreciation expense $2,625 15 Total operating expenses $49,100 16 Income from Operations $15,405 17 Other income (expenses): 18 Interest expense -$1,322 19 Interest and other income, net $159 20 Total other income (expenses), net -$1,163 21 22 Net income $14,242 23 24 25 Heart Hospital 26 Balance Sheet 27 September 30, 2020 (in thousands) 28 Current Assets: 29 Cash $14,202 30 Accounts Receivable, net $5,918 31 Medical supplies inventory $1,211 32 Prepaid expenses and other current assets $1,429 33 Total current assets $22,760 34 Property, plant, and equipment, net $33,769 35 Other assets $901 36 Total assets $57,430 37 38 Current Liabilities: 39 Accounts payable $1,910 40 Accrued compensation and benefits $2,543 41 Other accrued liabilities $1,843 42 Current portion of long-term debt $2,064 43 Total current liabilities $8,360 44 Long-term debt $21,640 45 Total liabilities $30,000 46 47 Owners Equity: $27,430 48 Total liabilities and shareholders' equity $57,430 49 Common Size Analysis 24.73% 10.30% 2.11% 2.49% 39.63% 58.80% 1.57% 100.00% 3.33% 4.43% 3.21% 3.59% 14.56% 37.68% 52.24% 47.76% 100.00% a. Perform a Du Pont analysis on the Heart Hospital. Assume that the peer group average ratios are as follows: Total margin Total asset turnover Equity multiplier Return on equity (ROE) Industry average 15.0% 1.5 1.67 37.6% Heart Hospital
